The boss of Tesco Bank has warned that the profitability of the financial services arm of the supermarket group will be held back in coming years by the launch of its much-delayed current account.

Benny Higgins intends to start testing the bank's first current account early in the new year with the aim of launching it in the first half of the year – at least three years later than expected.

He would not comment on the design of the current account but Tesco Bank has in the past indicated it may require a small monthly fee.

The launch comes after the start of a new switching service guaranteeing to move current accounts between providers glitch-free. Virgin Money is aiming to launch a current account next year.

But Higgins – who joined the bank after leaving HBOS just before the banking crisis – insisted that the launch was not delayed and the button was not going to be pressed until Tesco had transferred bank customers to a new computer system.

The current account, Higgins said, was "the last brick in the wall of becoming a real bank", five years after Tesco bought out its joint venture from Royal Bank of Scotland.

He was speaking as the bank announced it was recruiting for 600 new jobs in the next two years, on top of the current 4,000, specifically to handle the new account.

The bank made £88m in the first half but Higgins indicated future growth in profits would be restrained by the set-up costs of current accounts.

"We will be in for a period of more tempered profitability," said Higgins. "The profit profile of a current account takes quite a few years to mature."

He refused to reveal what features the crucial product would have but it is likely to be linked to Tesco's Clubcard scheme. A mortgage product launched 18 months ago – which Higgins admitted has been slower to sell than hoped – offers Clubcard points.

Higgins is targeting the existing 16 million Clubcard holders rather than direct targeting of customers from other banks.

"There is a lot of interest in it. We are getting 5,000 searches a month for a Tesco current account on Google. I'm not saying that's record breaking but that's on the basis we don't have one. That's people just curious. We'll be focused on Clubcard customers and we don't set out with market share [targets]," Higgins said.

The focus is also on customers accessing their accounts digitally. "What we're not going to do is roll out a big branch network. There have been all these predictions of banks retreating from bank branches. I think we are starting to see more of that now," said Higgins.

Barclays has announced it is cutting 1,700 branch jobs because of the increased use of iPads and tablets for banking while Tesco Bank has seen an increase in use of tablets from 8% of transactions to 14% in a year.